Brexit fears cause volatility in GBP pairs

GBPJPY, 240 min

Recently GBP has been under pressure due to fears that the country might leave the European Union. I view this as a very low probability event but that doesn’t stop markets from being volatile. While Sterling has been under pressure the Japanese Yen has been either rising or moving sideways. This has brought the GBPJPY significantly lower and I don’t see an immediate reason for this psychological setting to change. We therefore look for opportunities to sell the rallies to join the trend as long as the trend lasts.

The pair is trending lower in weekly, daily and 4h time frames and is currently oversold as per Stochastics in weekly timeframes while there’s some attempt to move Stochastics higher in the daily chart. On February 22nd GBPJPY moved below an important support at 159.79 and therefore turned it into a resistance.  This resistance also coincides with the 23.6% Fibonacci retracement level. We are interested in short trades GBPJPY between 159.50 and 160.54 if the price rallies there and give us a sell signal. Target 1 for this potential trade is at 154.70 – 155.65 while target 2 is at 148.55-149.30.

If you don’t know what to look for as a sell signal and how to set stops and plan your position sizes, you are welcome to join my Live Analysis Webinar on March 1st and 1pm GMT. Come along and bring your trading friends as well but please remember that seats are limited! This webinar is free, therefore it advisable to register asap.

Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD stabilizes near 1.0800 as trading action turns subdued

EUR/USD stabilizes near 1.0800 as trading action turns subdued

EUR/USD holds steady near 1.0800 on Thursday and remains on track to end the day in negative territory following upbeat macroeconomic data releases from the US. The action in financial markets turn subdued as trading volumes thin out heading into Easter holiday.

EUR/USD News

GBP/USD extends sideways grind above 1.2600

GBP/USD extends sideways grind above 1.2600

GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth help the USD stay resilient against its rivals and limits the pair's upside.

GBP/USD News

Gold pulls away from daily highs, holds above $2,200

Gold pulls away from daily highs, holds above $2,200

Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.

Gold News

XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC

XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC

XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase. 

Read more

Portfolio rebalancing and reflation trades emerge into Q2

Portfolio rebalancing and reflation trades emerge into Q2

Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.

Read more

Majors

Cryptocurrencies

Signatures